Practical Steps Recent College Graduates Can Take to Secure Their Financial Future

If you want to have a positive financial future, you need to start as early as possible. At some point, you will have plans to buy a car, invest in a house, and save for retirement.

At all costs, you want to protect your credit score–this means paying off your student debt. To achieve your financial goals after graduation, you have to plan ahead, create a budget, and avoid a few financial mishaps.

Start by Planning Ahead

Now that you have graduated, you will start to earn money at a steady pace. While your earnings may change, you will do better financially if you keep your spending to a minimum.

You are already used to spending less–keeping this habit will ensure that you are financially stable. Whenever you apply for a loan or anything else, you will need to have documents available to show your income–so start getting organized, and consider creating a more serious budget.

All of your financial information should be kept in the same place–this makes it easier to find your data when you need it. You can also keep track of the debts you are suffering with, this will help when you begin negotiating.

Negotiate Debt Collection

When you are stuck in debt, your first goal is to save 25 percent of the total debt cost. Then, reach out to the collection agency using contact information from your credit report. Calling is the best option since you will get a faster response than writing a lengthy email that can be hard to understand.

Avoid letting them talk you into any settlement that is more than what you can afford. You will be able to settle for less than you would pay with a payment plan. If you get involved with a payment plan, it can increase the amount of time the collection agency can continue to collect the debt.

Ask for the name of the person you are talking to and their direct phone number, and tell them how much you want to settle the debt for. Once you agree to a settlement, tell the representative that you want a letter that shows the account identification information, the settlement amount, and that the account will be considered paid. The letter should also say that your credit report will reflect the change. When this process is done, send in the payment and finalize the last details.

Save an Emergency Fund

To prevent future financial problems, you need to save anemergency fund. Depending on your personal needs, you will want an emergency fund that covers three to six months of your expenses.

This will ensure that you can cover your bills or sudden car repairs in case something happens. Be aware that this fund is strictly for emergency use, and it should be taken very seriously.

The last thing you want is to rely on a credit card to pay for an emergency expense, because this can lead you into extreme debt.

Creating a fund big enough will take a lot of time, but it is worth it to start now. This prevents you from running into a big problem with no reasonable solution.

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Get Health Insurance

While you are physically in the prime of your life, you can suddenly become sick or injured. Investing in health insurance is important so that an unexpected injury does not hurt your future.

If you are seriously injured without insurance, you will have to pay for all of your expenses out of pocket, it can add up if you don’t stay on top of it. Medical debt is the largest cause of bankruptcy, which is why you want to be as prepared as possible.

Some people believe that health insurance is too expensive, and don’t plan on investing in it since they’ve been healthy their whole life.

These types of people will be sadly mistaken when they end up hospitalized without a way to pay their bills.

Start Saving for Retirement

It seems silly to start saving for retirement since you’ve just started your career, but right now is actually the best time to start saving. To accrue $1 million, you only have to save $200 to $300 a month if you start yourretirement fund after graduation.

If you wait a decade or two, it may take up to $1,000 a month or more to reach the same financial goal. By starting now, you will be ahead of the game. A little money set aside today will ensure that you have plenty of money aside when you’re done working.

Be Responsible With Your Money

The bottom line is, you need to make smart decisions with your money. If you have a subscription you hardly use, get rid of it, consolidate your student loans, cut your spending down and keep up with it.

Using these tips will ensure that you have a comfortable amount of money to fall back on. The last thing you want is to work for your entire adult life and have no money left when you’re retired, or when you’re stuck in a dangerous situation.